How Israel's vital tech sector is navigating war
Technology
Tech is the single biggest sector of the Israeli economy
(Web Desk) - Israel’s vast tech sector has seen its fair share of crises, from financial downturns and the Covid-19 pandemic to periodic flare-ups in the Israeli-Palestinian conflict.
Each time, the industry has bounced back, demonstrating why the country of just 9 million people is known as the world’s “startup nation.”
Tech is the single biggest sector of the Israeli economy. Sentiment had already taken a hit before the war broke out. Some tech executives said government plans to weaken the judiciary spooked investors, worsening a global slowdown in fundraising for startups.
The war’s most immediate impact on tech firms has come through the workforce. Israel has called up more than 300,000 military reservists to fight in the war, most of them working and studying in Israel, though some have returned from abroad.
SNC estimates that about 10% of tech employees in Israel have been drafted, with the number climbing as high as 30% in some companies.
Nasdaq-listed Monday.com (MNDY), a company headquartered in Tel Aviv that develops project management software, said about 6% of its workforce around the world had been called up.
“Being a global team we are really able to pick up and support each other and don’t anticipate any disruption to business,” head of communications Leah Walters told CNN.
Israeli tech firms, accustomed to armed conflict, have “playbooks” in place to ensure they can continue operating even during a war, according to Yaron Samid, the managing partner of TechAviv, a network for tech company founders.
“The pandemic also equipped our companies and their employees with… work-from-home capabilities,” he added.
But certain activities vital to the tech ecosystem can’t be done remotely. At least three high-profile tech conferences due to take place this month have been canceled, including an artificial intelligence summit hosted by chipmaker Nvidia (NVDA), at which CEO Jensen Huang was to deliver a speech in person.
Tech executives who spoke to CNN said fundraising and dealmaking could also take a knock, as visits to the country come to an abrupt halt and investors wait to see how the situation unfolds.
“Over the next couple of weeks it’s going to be tough, especially for people like us who are raising money,” said Jon Medved, the CEO of OurCrowd, a major global venture investing platform based in Israel.
“The big challenge for a startup economy is making sure that the money keeps flowing because the vast majority of these startups are not profitable… they need ongoing investment,” he told CNN.
